Zacks_Analysts' Blog : Fluor's Canadian FEED - Analyst Blog

Fluor Corporation (FLR) received a front end engineering and design (FEED) services contract from the North West Redwater Partnership, a joint venture between North West Upgrading, Inc. and Canadian Natural Resources Limited, for a new refinery project in Alberta, Canada. The contract has been included in the third quarter 2011 bookings of the company for an undisclosed amount.

Two sections of the refinery for upgrade of bitumen, separation of components and impurities removal will be Fluor’s responsibility as per the contract. The company will also re-examine the FEED deliverables based on a revised crude slate.

The energy sector in Canada is expanding continuously. Fluor’s role in the Redwater project would further help in the expansion of this sector. The Redwater bitumen refinery, to be located north of Edmonton, is designed to be environmentally friendly and meet the urgent demand for North American energy resources.

The new refinery will produce diesel, diluent, naphtha and other related products by using oil sands bitumen. To reduce the impact on the environment, gasification, carbon capture and storage will be incorporated by the refinery. Fluor will execute the work on the project from its offices in Calgary, Houston and New Delhi.

Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis. It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government.  The company’s prime competitor is Jacob’s Engineering Group (JEC).

We continue to maintain a Neutral recommendation on Fluor Corporation. The stock retains a Zacks #2 Rank (Buy Rating) over the next one-to-three months.